May, 16, 2018

[op-ed snap] A triple blow to job guarantee scheme


Mains Paper 2: Governance | Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

 From UPSC perspective, the following things are important:

Prelims level: MGNREGA, Minimum Wages Act, 1948, National Electronic Fund Management System

Mains level: The newscard throws light on the institutional bottlenecks in the implementation of the job guarantee scheme


Pending wages under MGNREGA

  1. The total amount of wages pending under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) scheme for the whole country (2016-17) was around ₹11,000 crore
  2. This sum is a fifth of the MGNREGA budget announced for the financial year 2018-19
  3. On the other hand, rising instances of frauds whose amounts exceed far than the requirements of the very job guarantee scheme need to be put in perspective

What the Scheme actually say?

  1. The scheme is meant to be demand-driven in the sense that the government is mandated to provide work within 15 days of a worker seeking work. Otherwise, the worker is entitled to an unemployment allowance
  2. A second key provision of the Act pertains to payment of wages within 15 days of completion of work, failing which a worker is entitled to a delay compensation of 0.05% per day of the wages earned
  3. However, both these provisions have been routinely violated. There is an ongoing Public Interest Litigation in the Supreme Court (Swaraj Abhiyan v. the Union of India) concerning these violations

Three ways in which a lack of funds has led to a subverting of these provisions in letter and spirit

  • Budget allocation over the years has been insufficient
  1. While there has been an increase in the nominal budget in the last two years, after adjusting for inflation, the budget has actually decreased over the years
  2. The real budget of 2018-19 is much lower than that of 2010-11
  • Even this low budget allocation has undergone various kinds of curtailment
  1. By December of each year, through a bottom-up participatory planning approach, every State submits a labour budget (LB) to the Centre
  2. This contains the anticipated labour demand for the next financial year
  3. The Centre, on its part, has been using an arbitrary “Approved Labour Budget” to cut down funds requested by States (using the National Electronic Fund Management System, or Ne-FMS), making this a supply-driven programme

Curtailing the Work-demand of Workers

  1. Ne-FMS guidelines issued in 2016-17 say the Management Information System (MIS) “will not allow” States to “generate more employment above the limits set by Agreed to LB”
  2. This meant that the work demand of workers was not even getting registered and the MIS was being used as a means to curb work demand
  3. Thus the “approved labour budget” puts a cap on funds

Worsening situation due to poor allocation

  1. The Ministry of Finance memorandum said that the principal reasons for payment delays were infrastructural bottlenecks, unavailability of funds and lack of administrative compliance
  2. The study findings and this memorandum are at odds with the Centre’s dubious claims of 85% of payments having been made on time
  3. The poor are paying a heavy price for this throttling of funds by the Centre

Stagnating Wages

  1. Delinking of MGNREGA wage rates from the Minimum Wages Act (MWA), 1948 has contributed to this
  2. MGNREGA wages are a less lucrative option for the marginalized, being lower than the minimum agricultural wages in most States
  3. As primary beneficiaries of the Act, women, Dalits, and Adivasis could be the most affected and pushed to choose more vulnerable and hazardous employment opportunities
  4. Such contravention of the MWA is illegal

Way Forward

  1. MGNREGA now faces a triple but correlated crisis — a lack of sufficient funds, rampant payment delays, and abysmal wage rates
  2. What this reflects is not only a legal crisis created by the Centre but also a moral one where the fight is not even for a living wage but one for subsistence
  3. One hopes for a just order from the judiciary
May, 14, 2016

Compensation for wage delay in MGNREGA

  1. Context: Issue of delayed MGNREGA payments in backdrop of drought condition in country
  2. The Govt of India is directed to ensure that compensation for delayed payment is made to the workers whose wages have been delayed beyond 15 days
  3. A worker is entitled to compensation at the rate of 0.05% per day for delayed payment of the wages due
  4. This is mentioned in paragraph 29 of Schedule II of NREG Act and the Guidelines for Compensation for that effect
May, 14, 2016

SC pulls up Centre for delay in MGNREGA payments- II

  1. Context: Issue of delayed MGNREGA payments in backdrop of drought condition in country
  2. SC: Govt has made no provision for compensation due to delay while releasing the wages for 2015-16 of Rs 7,983 crores
  3. It is also regrettable that the government cleared the pending wage bill for 2015-16 only during the pendency of this case
  4. Welfare: This does not behove a welfare State in any situation, more so in a drought situation & this has affected the Social Justice
May, 14, 2016

SC pulls up Centre for delay in MGNREGA payments

  1. Context: Issue of delayed MGNREGA payments in backdrop of drought condition in country
  2. SC: Directed the Centre and the States to make all efforts to encourage needy persons to come forward and take advantage of the MGNREGA scheme
  3. Slammed the govt for not giving compensation to workers for delayed payment of wages under MGNREGA even during the current drought
  4. The govt had no provision for providing compensation to the workers & a success rate below 50% is nothing to be proud of
Aug, 13, 2015

MGNREGS reduced poverty, empowered women


  1. A survey found that MNREGS reduced poverty overall by up to 32% and prevented 14 million people from falling into poverty.
  2. MGNREGS has helped many women earn cash income, thereby, enabling them to make independent decisions.
  3. Children from MGNREGS households were likely to obtain higher levels of educational attainment than their non-MGNREGS peers.
  4. It increased financial inclusion and declined reliance on moneylenders, saving huge interest payments that is to be paid to moneylenders.
  5. Some bottlenecks that MNREGS still faces are
    • Paucity of funds at the level of implementations,
    • Erratic fund flows
    • Inability of all interested households to get 100 days of work.
Aug, 06, 2015

Cabinet approves direct release of wages to MNREGA workers


  1. Delayed payments has been a major problem in MNREGS implementation.
  2. Direct benefit transfer ensures that scheme funds do not get indefinitely parked with the state finance departments.
  3. In 2014-15, only 28 per cent of the payments could be made on time to the workers under the scheme.
  4. The average number of days of employment per household under the scheme fell to 40.14 in 2014-15 from 45.97 in the previous year.
Jun, 21, 2015

[op-ed snap] Is the MGNREGA being set up for failure?


MNREGA has been under constant criticism for being leaky and addressing only the symptom but not the disease.

However,the criticism ignores 2 very important things –

  1. Nearly all studies on MNREGA show its contribution in removing poverty.
  2. The voice of actual beneficiaries is hardly heard in any criticism.

Studies reveal that work under MNREGA have helped create rural infrastructure like anganwadis, toilets, rural roads etc. It has also helped in boosting agricultural productivity through development of wasteland/fallow land, and construction of post-harvest storage facilities and work sheds.

  1. It has been of huge help especially to female headed households.
  2. In many states, up to half of the MGNREGA income was spent on food, which improved health and nutrition — a critical factor in a country plagued by malnutrition.
  3. Skill development is necessary but it can effective only on a filled stomach – which MNREGA tries to achieve.

In recent years, effectiveness of MNREGA has not been upto mark because of delays in assigning work to those demanding and late payment of wages.

MGNREGA is a demand-driven scheme.

A widespread denial of work under MGNREGA and endless delays in wage payment would end up killing the demand for work. If that happens, it wouldn’t be long before the program is deemed a failure and wound up for good.

Jun, 19, 2015

[op-ed snap] Positive expansion

  1. Acc. to India Meteorological Department’s forecast, we are looking at consecutive drought-like years for the first time since 1987.
  2. NDA government proposes to extend the number of work entitlement days under the MGNREGA from 100 to 150 in drought-hit districts.
  3. MGNREGS could bring relief to farm workers and labourers affected by the laying waste of cropland for the rabi cycle due to both unseasonal rain and deficient monsoon.

  4. The record of success of MGNREGS since its launch in 2006 as a welfare initiative that empowers distressed rural households has been well-documented.
  5. Its weaknesses, in terms of the quality of assets created and leakages in implementation, are also well-known.

    While the “extra 50 days” is a welcome move, there needs to be a better focus on timely wage payments and demand for work under the scheme.

Jun, 15, 2015

Government mulls to raise number of days under NREGA scheme to 150

The rural development ministry, which is working on the proposal, is of the view that 50 additional days of employment will compensate farmers who have suffered crop loss due to deficient rains.

  1. On an average, 25% of the rural households seek employment under the Act annually.
  2. The government had last year extended the number of wage days under MGNREGA to 150 in Uttarakhand in the wake of floods that left thousands dead and missing.
Feb, 28, 2015

Now, 150 workdays for tribals under MGNREGA

  1. Those tribals who have received land rights under the Forest Rights Act, 2006, will be eligible for additional 50 days of wage employment under the rural job scheme.
  2. The additional person days through MNREGA will allow the households to undertake additional work on their own land.

The objective of MGNREGA is aimed at enhancing livelihood security of rural households for creating durable assets and discouraging migration. The focus of the scheme is on water conservation, water harvesting, drought proofing, land development, flood control and rural connectivity among others. The scope of the scheme has also been extended from time to time.

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